A total of 31.4 percent of global fisheries are being fished at biologically unsustainable levels, according to the Food and Agriculture Organization (FAO) of the United Nations. However, a 2016 study by Costello and others said the application of sound management reforms to global fisheries will increase biomass by 619 million metric tons relative to a business-as-usual scenario.
One way to enable sustainable fisheries management is to target the activities of small-scale coastal fishing businesses. Given their socioeconomic status, coastal fishing enterprises typically lack the economic independence to be able to completely disengage from unsustainable practices that are in favor of lucrative catch. They also represent 90 percent of the total 30 million fishing businesses globally, according to the FAO. This shows their vital role in the transition toward sustainable fisheries.
It is critical for funding to be channelled into fishing businesses as a way to incentivize a behavioral shift toward sustainable practices. With government resources becoming increasingly constrained as some nations address multiple challenges, there is a greater need to leverage private capital. Despite this need, there is a scarcity of platforms and financial instruments available to channel resources toward fisheries.
Two organizations working to bridge this gap are Meloy Fund and Catch Together. Meloy Fund is an impact investment fund that makes debt and equity investments in fishing-related enterprises that support the recovery of coastal fisheries in Indonesia and the Philippines. The fund is a subsidiary of Rare, a global conservation organization. Catch Together partners with fishing communities in the United States and Canada to structure and finance impact investments. It also provides support services such as help for fishing communities in acquiring quotas.
Smallholder agriculture and small-scale fisheries have similar business models. But impact investments in the latter are trailing behind. Dale Galvin, managing partner at Meloy Fund, said the unpredictability of fisheries is the reason for this. Kelly Wachowicz, cofounder, managing partner, and CFO at Catch Together, said that the “ocean environment is much more dynamic than terrestrial environments.” Therefore, “management systems and investment strategies need to be able to be adaptive to accommodate changes over time” that need to be successfully implemented in fisheries.
An additional reason for risk in fisheries is the difference in property rights. Unlike with agriculture, where land tenure is very clear, in fishing “you don’t have the right to generally manage your fishery,” Galvin said. As a result, “investments are much harder to organize” and “monitoring fisheries management strategies in the water is difficult,” Wachowicz said.
Building a track record of successful fisheries investments is key to creating established credibility and curtailing perceived risk. Meloy Fund and Catch Together do exactly that. Meloy Fund looks at growth-oriented enterprises that have a direct connection to coastal fisheries. Galvin said not only are coastal fisheries an under-invested sector, they also “achieve most of the social and environmental objectives.” These include impacting the state of coral reefs, generating livelihoods for small-scale fishing enterprises, and benefiting the broader economy. Along with making its investments, the fund works to improve the management of coastal ecosystems.